Open-Ended Contracts in Saudi Arabia Must Move to Qiwa by August 6

With Phase 3 of the Kingdom's landmark labour reform weeks away, employers with indefinite-term workers must act now or risk legal exposure.

| Written by Tripti Mehta

Saudi Arabia's Unified Employment Contract Initiative enters its third and final phase on August 6, 2026, the date by which all indefinite or open-ended employment contracts must be migrated to the official template and documented on the Qiwa platform.

The initiative, led jointly by the Ministry of Human Resources and Social Development (MHRSD) and the Ministry of Justice (MOJ), has been rolling out since October 2025. Phase 1, effective October 6, 2025, covered all new contracts and updates to existing ones. Phase 2, effective March 6, 2026, brought fixed-term contracts into the system upon renewal or extension. Phase 3, starting August 6, 2026, extends the requirement to all existing indefinite-term contracts.

What Changes for Employers

To qualify for enforcement under the new system, contracts must be documented on the Qiwa platform using the official template, and must carry an Execution Number issued through the Documentation Center at the Ministry of Justice, generated automatically via technical integration between the two ministries.

The documentation process requires the employer to submit the contract on Qiwa, after which the employee may approve, reject, or propose amendments. Once both parties have agreed, the contract is considered documented and enforceable.

The Wage Enforcement Mechanism

The most consequential aspect of the reform is what happens when wages are not paid. Workers can file enforcement requests via Qiwa and Najiz if wages are unpaid for 30 days or only partially paid after 90 days. Employers can contest claims within five days, with payment verification handled automatically through the Madad platform.

If employers fail to comply within five days, the Enforcement Court applies sanctions under the Enforcement Law, starting with freezing the employer's bank accounts and blocking access to government portal services.

This marks a significant departure from the previous process, which required employees to go through a 21-day amicable settlement phase before reaching labour courts, a process that could stretch over two to six months.

What is Enforceable

Only the wage clause is subject to enforcement under this mechanism. This covers basic salary, housing allowance, transportation allowance, and other cash benefits.

What Employers Should Do Now

Employers must ensure that the salary stated in the Qiwa contract matches exactly what is paid through the Wage Protection System, and that any deductions are in accordance with applicable Saudi labour law. Payroll practices should be reviewed to eliminate inaccuracies between the documented contract and actual payments.

Source: Ministry of Human Resources and Social Development (MHRSD), Kingdom of Saudi Arabia; Clyde & Co; Morgan Lewis; DLA Piper GENIE; Pinsent Masons